From Lush to Lancome, Gosh to Guerlain, there are strong beauty brands at every price point. All of them benefit from the near-universal desire to look good.
Investment in NPD is high, ensuring a constant supply of fresh claims to tempt shoppers. Indeed, there have never been so many opportunities to buy into the sector.
Boots is the biggest retailer of beauty products and, while The Body Shop has an extensive nationwide chain, there is also a fair spread of smaller retailers competing in this sector including Molton Brown and Space NK.
Department store concessions account for a significant part of the market for higher-end brand names.
Lower-cost
At the other end of the scale, supermarkets' lower-cost beauty offerings have been particularly challenging for mass-market specialists, such as Boots and Superdrug. The supermarkets' key advantage lies in their price competitiveness and convenience, although they are stronger in toiletries than beauty products.
Lipstick is often cited as one of the select range items that sells well in a recession as women continue, or increase, purchases of affordable treats while reining in spending on higher-cost items. However, research by Ipsos MORI shows that more than half of adults have not changed their beauty shopping habits during the downturn, although many have looked to save money by buying own-brand items or seeking out discounts and deals.
Billion pound market
The health and beauty sector was worth an estimated £17.7bn in 2008, according to Mintel, based on all retail sales made through health and beauty specialists. With Boots and NHS receipts removed, the estimated value for 2009 was £3.85bn.
Looking purely at consumer spending in the beauty market, Mintel estimates this fell by 1% in 2009, based on data for the first three quarters of the year, to reach £15.9bn.
This is a rare area of retail that has been left relatively untouched by the boom in online sales; these account for only about 7% of the market from last July to October, according to Mintel. The few specialists there are, such as Beauty Expert, Fragrances Direct and Mankind, remain niche players.
In line with many other sectors during the recession, retailers have been offering more discounts, and shoppers have become adept at finding the best deals. The middle mass-market specialists and supermarkets have been particularly focused on these tactics, while more upmarket retailers have sought to protect their reputation for high quality and, therefore, high prices.
Boots' combined beauty and toiletries sales are worth more than £2bn. Ipsos MORI research shows that more than half of the adult population shops there for these items. It invests heavily in its own-label ranges which have become strong brands in their own right.
This is in contrast to most other own-label beauty ranges, which struggle to compete with the investment, and hence innovation, of the powerful, international beauty brands.
Loyalty
Boots' Advantage loyalty card is a mainstay of its marketing activity. It has about 16.4m cardholders and it has been shown that women in particular, are encouraged to repeat purchases as a result of loyalty schemes.
However, more generally, the proportion of shoppers who prefer discounts is almost three times that of those who prefer loyalty schemes, according to Ipsos MORI.
Superdrug, with its value proposition, has had to fight off supermarket competition and has been adopting a more fashion-oriented positioning to differentiate itself and appeal to early adopters and younger shoppers.
The fact that the UK population is ageing is not good news for beauty retailers, as older consumers generally spend less on this type of item. Nonetheless, the pressure to take care of one's appearance is stronger than ever so, if products better suited to older men and women are on offer, then this could change.
Looking to the future, Mintel predicts that, by 2014, health and beauty specialists (excluding Boots and NHS receipts) will have sales of £4.45bn, a 16.6% increase.